[inner_roadster]

Despite soaring levels of congestion, declining levels of courtesy, rising fuel prices , we always find a reason to take out our car. This is what every car enthusiast looks for. But still I wondered about the financial load that comes with owning car in India. If you own a car, the government makes sure there shouldn't be any space for you to be exempt from paying taxes.

So when you decide to purchase a new car the process of taxation start.



So, now that you're ready to buy a new car and are aware of all the costs that are involved:
1. Down payment
2. Monthly EMI
3. RTO Registration cost
4. Insurance cost

The tentative estimate of actual cost of a car priced about 8 lakh will be as follows:




Thing does not end here, now you need to pay the tax for running your car. On refuelling the central and state governments levy taxes on fuel. The tax includes 55% of the overall on petrol and 50% on the diesel of the entire retail price. The petrol and diesel taxes vary from state to state as different states levy different Value Added Tax (VAT) and sales tax.
In states such as WB, the cost of a litre of petrol is
Base Price of Petrol : 47
Sum of all tax (ST/ Central): 57
Cost of petrol we pay (Rs.) : 104

Even after paying all of these taxes, we still can't breathe easily. You have to now enjoy driving on congested roads with potholes, uneven pavement, and roads with poor drainage systems that cause waterlogging because you have paid normal road tax. You have to spend many hours to cover even a short distance of 5-10 kilometres.



In case you want to have the access of good roads, you now have to pay the toll charges. I have always wondered why we are required to pay toll tax in addition to road tax in India. Is it fair to charge us twice for using the same roads that are built with our tax money? The toll tax system should not be a source of revenue generation for the government or private contractors but a means of providing better and safer roads for the public. According to the NHAI's financial statistics, some of the toll roads have already recovered three to four times their construction costs.



To sum up what we are paying.
1. GST + Cess for car purchase
2. Road tax (recurring expense)
3. Service Tax Insurance (recurring cost)
4. VAT (State + Central Government) on petrol.
5. Toll Charges.
6. Traffic Challan for traffic violation
7. Service tax on Car Loan and EMI’s
8. Parking cost

Just think about what we get back in exchange for all of the taxes and expenses we pay to both the central and state governments.

[xenon0025]

Thanking you for detailing out the different costs. I was thinking about this the other day. Maintenance, Insurance, tolls, parking etc are the recurring costs that a car owner has to bear. In addition, government has opened a new revenue stream by putting unrealistic speed limits on downward gradient of 30/40kmph on a highway and placing cameras and issuing fines to people.

[srvm]

In addition to the above financial burden, please add the 'Mandatory 3rd party insurance' premium we have to shell out every year. With no real benefit in return. I'm yet to encounter someone who has received compensation from insurance company for a damage caused by 3rd party.

[Asoon]

System and the we (who create this system) are both responsible for the current state. A nation where hardly 5% for the individual pay taxes, tax to benefit ratio for the ones getting taxed can never be fair.

Only option to generate tax money now is indirect taxation which is in the form of GST / CESS etc. Do you think the a businessman / politician / real estate person driving Fortuner / Innova / Defender is paying his fair share of tax - NO!!! , then the way to extract tax is what to you have penned down (Road Tax, GSt , Fuel Tax etc.)

Ideally they should increase indirect taxation and allow the tax payers to net off indirect taxation with the ITR filed so ensure level playing field. [e.g. if I have pain 5L tax this year then i can use it to make my taxes on car / fuel purchase zero]

[rkv_2401]

Don't forget that if you're salaried, you buy this 8L car for 11.3L on road with your net income after taxes, so you've already paid another 30% (3.39L) there!

Originally Posted by inner_roadster

Even after paying all of these taxes, we still can't breathe easily. You have to now enjoy driving on congested roads with potholes, uneven pavement, and roads with poor drainage systems that cause waterlogging because you have paid normal road tax. You have to spend many hours to cover even a short distance of 5-10 kilometres.

And after paying all these taxes and burning up fuel, which is taxed at >100% sitting in traffic, the potholes will break your suspension and if you're unlucky enough to own a VW, the ABS sensors just replaced 6 months ago!

Which you also have the privilege to pay GST for to get replaced.

Ideally they should increase indirect taxation and allow the tax payers to net off indirect taxation with the ITR filed so ensure level playing field.

That wouldn't be too bad, actually.

[inner_roadster]

Originally Posted by rkv_2401

That wouldn't be too bad, actually.

Ideally, the government should levy taxes based on the services it provides to the individual taxpayer. However, in developing nations such as India, individuals are divided into two categories.
Those who pay taxes yet do not receive any benefits from the government
Those who do not pay any taxes but receive all the benefits from the government.
Such a tax payment is extremely unfair, yet it is popular due to the power of the number of votes, which is most important in a democratic system.

[vegitakarthik]

Originally Posted by inner_roadster

Ideally, the government should levy taxes based on the services it provides to the individual taxpayer. However, in developing nations such as India, individuals are divided into two categories.
Those who pay taxes yet do not receive any benefits from the government
Those who do not pay any taxes but receive all the benefits from the government.
Such a tax payment is extremely unfair, yet it is popular due to the power of the number of votes, which is most important in a democratic system.

All we can do is talk about it somewhere to vent out the frustration.

Think about it, EV's have high entry point with poor charging times & range compared to ICE. The way forward for India should be hybrids which shows incredible mileage especially in heavy traffic scenarios, until EV's mature. We waste soo much fuel in signals and traffic jams where hybrids could save lot of money for us. But lobbying by two big Indian firms have made sure hybrids doesn't get tax benefits.
Issue clearly here is priority of Government & politicians

1. Will hybirds help fill up government coffers?
No. Reduced fuel usage, less taxes.

2. Do government officals use 0.0000000001% of brain while framing policies?
No. If you see above tax structure, cars like Currv/creta diesels which are fuel efficient are taxed at 48% while fuel guzzlers Xuv 700/Safari's/Fortuner's are taxed at 50%(just 2% more)

3. Need of the hour is betterment of traffic manners through disciplined & stringent norms for issueing licenses. But what does our ministry say?
a) Lets ban diesels.
b) High speed's causes accidents. So lets implement revenue collection.. err sorry, lets install speed cams everywhere with fines.
c) Launch tolls. Now scrap it install satellite based ones. Soon scrap that as well and keep iterating.

I have entered the 30% taxation group for past two years with decent increment compared to Industry standards(!Given the fact that appraisals where poor across IT sector in last 2 years). But I don't feel like my revenue has increased that much.
<end of Rant. Apologise to moderators>

[fastestindian]

Income taxes are unfair, yes, but also very humbling. To be born in a country of a billion people and be one of the very few privileged people who can pay income tax, is a sign of great fortune.

I consider myself very very lucky. That, I am able to pay an income tax, has very little to do with me or my effort and is purely a matter of chance, keeps me grounded. I think of income taxes, not as a contribution to nation building but more as a fees for continuing to enjoy my good fortune.

[arin_12]

We must also think how the Freebies is also contributing to the cost of owning.

Benefit :
We get free rides on state operated bus for women in our house.

Outcome :
Increase in tax on registering vehicle.
https://economictimes.indiatimes.com...5.cms?from=mdr

Increase in fuel price.
https://www.moneycontrol.com/news/te...-12422341.html

Mandatory HSRP for older vehicle.

[RavenAvi]

Overall tax paid comes to 58%, including ownership, if one is aspiring to buy a 15-lakh rupee car today.



Worth a read.

[saubi2299]

Not justifying the toll taxes over and above the road tax and other taxes/cesses we pay on daily basis, but just wanted to share the thought process behind putting toll taxes.

During 19-20, Total Road Tax collected by Centre and States was Rs 7132 crores, and half of it was spent on the Department itself. Please note that Transport Departments are not just collecting Road Taxes, but their major work is enforcement, fitness testing, license test etc. And States/UTs are collecting this tax, which is less than what they are spending on district roads. We may ignore the inefficiency and corruption part for now.

Every year, close to 1 lakh crore rupees are being spent by Centre on rural roads under PMGSY. I don’t have exact numbers but surely, CGST collections on cars won’t cover this.

If we talk about Highways or any other major infrastructure, user-pay principle is the only sustainable way. Either govt spends upfront and collects toll, which can fund future road investments or private sector invests upfront and collects toll to get decent returns.

Whenever a new Highway is constructed, private sector does not want to take the risk of investing in it since it involves several risks that public may not let it happen, enough traffic won’t come, their own cost may increase etc.

GoI alone is spending close to Rs 3 lakh crore on National Highways for last many years, which is pretty high. Most of the roads being constructed are not tolled, or just tolled for namesake where cost or collection is actually more than the collections. These roads are still tolled for the sake of being consistent.

In next 5 years, GoI need to spend over 20 lakh crores to have good high speed connectivity.

Toll collected is not even covering operational expenses, forget the cost of land.

Yes, the entire process can be made more efficient to bring the down the costs, but our taxes will be still insufficient to have decent road network, unless each Highway network is tolled. As per some estimates, recently opened Dwarka Expeessway needs to have a toll of 400 rupees, which is simply absurd.

I am also equally irritated on paying the toll tax, but having seen the numbers behind the NH planning, its not so black and white. Govt babus are doing poor planning, and the project consultants (corporates) do unreal surveys and give absurd projections.

Problem in India is that despite paying toll taxes, NH are not of good enough quality.

[Thyag]

When it comes to taxes, I always remember what Mark Twain said

What is the difference between a taxidermist and a tax collector ?

The taxidermist takes only your skin.

It is going to increase more & more, those who can afford to escape from here will do so & the burden becomes more for the rest of the people. Politicians, Bureaucrats as always will be happy.

Instead of spending so much money in statues, temples, stadiums just to promote regionalism, communalism and Self Promotion, that money can be invested for greater infrastructure projects which will benefit country & people. But... What's the use of even thinking about it, while they are planning more of those activities !

[saubi2299]

Bottom line is that India has needs to spend on everything, from Airports, Ports, Rail, Metro, Schools, Hospitals, Affordable housing, and Defence.
North East India is witnessing an impressive improvement in highways, which is strategic in nature. These are heavy investments and give nip financial returns.

Money required for all the infrastructure lacking currently is nowhere enough unless significant taxes are levied.

India also needs private corporates to grow, for investments and for strategic reasons. If they are taxed heavily, they will fail which will have other effects. GST rates affect the inflation directly. Income Tax Rates affect the consumption, and investment split. Either way Govt ends up with tax collection. So, Govt is indifferent to IT payers.

I don’t understand much about how GST is bad. From whatever I understand, it has tried to bring more businesses under tax ambit and simplified the procedures. Intent of GST appears to be good. Interference of tax authorities has also reduced now, compared to earlier. May be wrong in this, feel free to correct me and educate me.

Compliances have increased for small businesses but this is the only way to bring them under tax net, and ultimately increase the income tax base as well, which makes it possible to rationalise the rates in future.

[xway]

Bridges falling down even before being built or completed. We had 5 cases recently in just a week. Morbi bridge disaster where 180 people died, despite of collecting charges.

Dwarka Expressway CAG report claimed cost escalated from 18crore/kms to 251crores/km. That in no way can be justified by any means considering its a 1400% hike.
Though the files and the report both disappeared from media after a short while.

Now we hear X kms of road built in a day. We are breaking records in road network, but in reality the mechanism has changed. Earlier a km or road constructed was the same, now if one km of road is constructed with 4 lanes its considered as 4 kms.

Airport roof collapses that too 4 in a week in July 2024, in which some deaths too were reported made us look bad when we say that we are building the future.

Newly built tolled roads having potholes or water logged in just one season makes one wonder if these were built only for data and reporting that x kms completed today.

I remember paying tolls with small change kept in the car a decade back, and it never pinched the pocket. Gone are these days now toll cost is huge, consider Meerut Expressway is Rs. 168 one way. Sohna road toll is Rs. 125 for a 25 kms stretch, that is an absurd toll of Rs5/km for a single car single journey.

Not to mention Kherki Daula toll which is daylight robbery in Gurugram where the toll fee is Rs. 85 for nothing. I mean why should one pay toll to move in the same city. Lot of promises made for shifting this since years and nothing has been done.

Apologies for ranting like this, but I feel the pinch too much every time that I pay these charges.

[saubi2299]

Originally Posted by Thyag

When it comes to taxes, I always remember what Mark Twain said



It is going to increase more & more, those who can afford to escape from here will do so & the burden becomes more for the rest of the people. Politicians, Bureaucrats as always will be happy.

Instead of spending so much money in statues, temples, stadiums just to promote regionalism, communalism and Self Promotion, that money can be invested for greater infrastructure projects which will benefit country & people. But... What's the use of even thinking about it, while they are planning more of those activities !

Completely agree. Specifically talking on statues and temples, can anyone throw some light on how much Govt spent on Statue of Unity, and how much is it earning from the footfalls?? Similarly, how much Govt has spent on temples, if it is getting any income from that??